SMILEY V. KANSAS, 196 U. S. 447 (1905)

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U.S. Supreme Court

Smiley v. Kansas, 196 U.S. 447 (1905)

Smiley v. Kansas

No. 13

Argued October 20-21, 1904

Decided February 20, 1905

196 U.S. 447

Syllabus

This Court will not inquire whether the finding of the jury in the state court is against the evidence; it will take the facts as found and consider only whether the state statute involved is violative of the federal Constitution.

The power in the state court to determine the meaning of a state statute carries with it the power to prescribe its extent and limitations, as well as the method by which they shall be determined.

Where the highest court of a state has held that the acts of a person convicted of violating a state statute defining and prohibiting trusts were clearly within both the statute and the police power of the state, and that the statute can be sustained as a prohibition of those acts irrespective of the question whether its language was broad enough to include acts beyond legislative control, this Court will accept such construction, although the state court may have ascertained the meaning, scope and validity of the statute by pursuing a rule of construction different from that recognized by this Court.

While there is a certain freedom of contract which the states cannot destroy by legislative enactment, in pursuance whereof parties may seek to further their business interests, the police power of the states extends to, and may prohibit a secret arrangement by which, under penalties, and without any merging of interests through partnership or incorporation, an apparently existing competition among all the dealers in a community in one of the necessaries of life is substantially destroyed.

The Act of the Legislature of Kansas of March 8, 1897, defining and prohibiting trusts, is not in conflict with the Fourteenth Amendment to the federal Constitution as to a person convicted thereunder of combining with others to pool and fix the price, divide the net earnings, and prevent competition in the purchase and sale of grain.

On March 8, 1897, the Legislature of Kansas passed an act, the first section of which is as follows:

"SEC. 1. A trust is a combination of capital, skill, or acts by two or more persons, firms, corporations, or associations of persons, or either two or more of them, for either any or all of the following purposes: First. -- To create or carry out restrictions in trade or commerce or aids to commerce, or to

carry out restrictions in the full and free pursuit of any business authorized or permitted by the laws of this state. Second. -- To increase or reduce the price of merchandise, produce, or commodities, or to control the cost or rates of insurance. Third. -- To prevent competition in the manufacture, making, transportation, sale, or purchase of merchandise, produce, or commodities, or to prevent competition in aids to commerce. Fourth. -- To fix any standard or figure whereby its price to the public shall be in any manner controlled or established, any article or commodity of merchandise, produce, or commerce intended for sale, use, or consumption in this state. Fifth. -- To make or enter into, or execute or carry out, any contract, obligation, or agreement of any kind or description by which they shall bind or have to bind themselves not to sell, manufacture, dispose of, or transport any article or commodity, or article of trade, use, merchandise, commerce, or consumption below a common standard figure, or by which they shall agree in any manner to keep the price of such article, commodity, or transportation at a fixed or graded figure, or by which they shall in any manner establish or settle the price of any article or commodity or transportation between them or themselves and others, to preclude a free and unrestricted competition among themselves or others in transportation, sale, or manufacture of any such article or commodity, or by which they shall agree to pool, combine, or unite any interest they may have in connection with the manufacture, sale, or transportation of any such article or commodity, that its price may in any manner be affected. And any such combinations are hereby declared to be against public policy, unlawful, and void."

Laws of Kansas, 1897, p. 481.

Subsequent sections prescribe penalties, and provide procedure for enforcing the act. On September 27, 1901, the county attorney filed in the District Court of Rush county, Kansas, an information charging that the defendant did, on November 20, 1900,

"then and there unlawfully enter into an agreement, contract, and combination, in the County of Rush

and the State of Kansas, with divers and sundry persons, partnerships, companies, and corporations of grain dealers and grain buyers in the Town of Bison, in the said county and state aforesaid, to-wit, Humburg & Ahrens, the La Crosse Lumber & Grain Company, the Bison Milling Company, and George Weicken, who were at the said time and place competitive grain dealers and buyers, to pool and fix the price the said grain dealers and buyers should pay for grain at the said place, and to divide between them the net earnings of the said grain dealers and buyers, and to prevent competition in the purchase and sale of grain among the said dealers and buyers."

A trial was had, the defendant was found guilty, and sentenced to pay a fine of $500, and to imprisonment in the county jail for three months. On appeal to the supreme court of the state, the judgment was affirmed. 65 Kan. 240. Whereupon this writ of error was sued out. chanroblesvirtualawlibrary